Tech Innovation, advice for startups looking at incubators and accelerators, the consumer payment mindset and how to accelerate learning in the African bush!
Supporting tech innovation in fintech startups is an exciting market. At Gluon Consulting we get to be on the proverbial “coal face” working with entrepreneurs to execute their creative visions and help to steer them towards success. Within my role I get to meet many exciting and driven people that share my passion for tech and new ideas.
One such person is Andrew Vorster. AV, as he is known, brings his passion to tech innovation in the form of business mentorship through his work with fintechcircle and mentorship at startupbootcamp. AV grew up in rural Africa, where Zulu culture use the term “imbongi” to refer to those that change the path of the future by telling stories with meaning, caution, hope and vision. AV has become much like the imbongi to the fintech world with his keynote speaking and insight into tech innovation. I was fortunate to get some time to sit down with AV and learn from one of the best, enjoy!
In this Q&A I cover some fascinating topics with AV, you can jump to any of these using the links below:
• AV’s “MBA” in the Angolan bush wars and accelerated risk profiling skills
• How AV shaped the future of payments with VISA
• Insight into the consumer attitude towards payments – friction or non-friction
• The need for data to drive financial choices for consumers
• The future of technology in the shower
• AV’s unique take on innovation
• Advice for tech startups on execution and how over 90% get funded (MUST READ)
• Cultural innovation in working remotely
SF (Steve Findley, Gluon Consulting): AV, thanks for joining me, let’s dive right in! Tell us a little bit about your background, from Africa through to CTO and VP roles in tech, to the current day?
AV: Wow! Starting from Africa? That’s quite some time ago!
One of my most polarising memories came from serving the military during my two years conscripted service, most of which was spent in the Angolan bush war.
I had recently arrived on the front line as a rookie, fresh out of my basic training with “One Special Services Battalion” – an elite armoured vehicle force of multidisciplinary solders. It was only my second patrol and I had been assigned to drive the lead “car” under the command of a veteran staff sergeant that had already spent years on tour up there (and survived of course). The “car” I was driving was a “Ratel 90”. The staff sergeant was in the command position, standing with half of his body out of the turret, giving him a high vantage point as we followed a set of tyre tracks that were easily visible in the soft sand – when he suddenly shouted “turn right” over the intercom in my helmet.
I ignored him, thinking that he was confused as I could clearly see the tracks ahead curved around to the left.
The next second, the staff sergeant’s heavily booted foot slammed into the back of my head, causing my helmet to pivot forward, smashing into the bridge of my nose which erupted with excruciating pain and a torrent of blood, causing me to slam on brakes and veer violently into the bushes where we came to a shuddering halt. I thought we had been hit by a missile or something and my confusion mounted when the sergeant continued shouting expletives at me!
As I staggered to my feet, struggling to focus through the blood and pain, I realised that he had kicked me on purpose! I stood there sullenly while he called the rest of the team from the remaining cars to gather round.
“I want this to be a lesson to all of you” he said. “This is something you will remember for the rest of your lives – Vorster!” he shouted. “What did I tell you to do?”
“Turn right staff” I replied.
“And what did you do?” he asked.
“Nothing staff, but I saw.…” I began to reply
“BUT NOTHING! I didn’t ask you WHY, I asked you WHAT – you did NOTHING – you carried on and ignored my instruction” he countered. “What you have to realise is that I’m up here for a reason. From my viewpoint, I can see things that you cannot possibly see. You don’t have the same information that I have at my disposal and sometimes I’m going to tell you to do things that may seem illogical, that from your viewpoint might look like I’m making a big mistake. If I have the luxury of time, I will explain my directions and give you the reasons so that you know why you are getting those instructions – but sometimes I’m not going to have that luxury. Sometimes you are just going to have to trust me. If you don’t give me that trust, we all die”.
We were beginning to think it was all a bit dramatic, but he carried on – “now all of you get up here on top of this vehicle. Look ahead and tell me what you see”.
None of us could see anything of note.
“Let me show you what you are looking for” said the staff sergeant. “Do you see where the tracks up ahead curve to the left? Do you see anything strange about them?”
He told me to get back into the driver’s seat and take the vehicle closer. As we got closer, the picture before us became clearer until at last, we could all recognise what the staff sergeant had spotted from a long way off – the tracks had been disturbed – the signs were subtle but clear – they had been booby-trapped with anti-tank mines!
If I had continued to follow the tracks and ignored his direction, we would all have been killed.
I wasn’t the last one to be on the receiving end of one of staff’s “lessons” and over the next eighteen months he kept us alive and taught us more about leadership than I’ve seen most people with MBA’s demonstrate in a lifetime.
Following military service I went on to University where I discovered the second love of my life – computers and technology. (Oh – I forgot to mention that I was in the same class at school with the first love of my life since I was 13 years old – we celebrate 30 years of marriage next year!)
Uni really brought out the Imbongi in me – I could envisage a technology fuelled future and I wanted to share what I knew about how it could make our lives easier with everyone. Our professor had a sideline consultancy business where he would broker out his top students to companies looking to explore the benefits of tech innovation and adoption and I quickly realised that this was where my future lay. I would go in and speak to the senior management to find out how the company worked and what it was trying to achieve. I would then tour the floors and listen to the people that worked there to hear their pain points and make my own observations. I’d then go back to Uni, socialise what I found with my Professor and my peers and develop a narrative that wove tech innovation into the business objectives, which I would then take back to the company that had engaged us – just like the Imbongi of my youth!
SF: Consulting before you were consulting – fantastic!
AV: Everything since then has really been a variation of exactly the same approach – I speak as fluent “business” language as I do “geek” and in doing so I have positioned myself as the translator between the business goals and the technology enablers in every role that I have held.
I am a passionate technologist but above all, I am a storyteller that shares experiences and dreams to accelerate the future that companies are striving to achieve.
SF: Whilst with VISA, you were still working in corporate but your work was at the forefront of fintech within the payments industry. Tell us how you applied thought leadership to the role and at what point everything tipped and you saw fintech truly emerge?
AV: The world of Financial Services was completely alien to me when I first joined Visa back in 2005. I had just come out of 5 years as CTO for a startup where everything was based on technology capability. I viewed Visa as a big technology company (which it is) – but the world of Financial Services wasn’t quite receptive to disruptive tech innovation back then – the hardest job was changing the “it’s always been done this way” mindset. As VP of Technology R&D, my team’s remit was to find the technologies and companies that we could leverage to accelerate the tech innovation agenda and shape the future of payments. The “thought leadership” was simply bringing the wider eco-system up to speed on what was possible and driving the thinking and conversations around what we should be doing about it.
As far as a “tipping point” goes, that’s hard to pinpoint. I was working with technology in financial services – everything we could leverage was “fintech” to me! Although widespread use of the term can be traced back to the early 2000’s, it’s the last 4 or 5 years that has seen the most explosive interest, investment and disruption in the sector in my opinion.
SF: At the 2015 Payments Knowledge Forum, you said “The people that use our products, don’t care about the “payments” experience, they care about the “consumption” experience” I completely agree with this, do you think this mantra is at the heart of fintech advances? Do a lot of consumers enjoy their experience more when the payment is “invisible”?
Nobody wants to “pay” for something. They want to “get” or “consume” something – paying for it is a chore.
AV: We want to drink a cup of coffee, get a ride home, read a book, watch a movie, listen to music – the payment is something we have to do – but it’s literally the very last thing on our mind and historically was always the very last step of the process. I think that any experience that removes the friction and renders the payment invisible, improves the customer experience.
Having said that, I’ve been involved in some really interesting discussions lately about consumer desire to add the friction BACK into the experience in order for it to be a conscious decision to spend money. There are those that think that making it too easy to pay for something encourages over spending which results in people getting into debt.
My personal opinion is that neither approach is better than the other and it all comes down to personal choice and balance. I predict that there will be a wave of fintech and tech innovation that will enable flexibility of choice and personal preference. Alongside, there will be a rise in enablers that will allow us to measure and manage our “financial health”.
Suggesting that “making it easier for people to spend money gets them into financial difficulty” is the same as saying “making it easy for people to buy burgers makes them fat”. It may be true, but I don’t see anyone suggesting that the industry must make it more difficult to order a burger and you need to validate your BMI and daily cumulative calorie count before you place your order.
In today’s connected world, if I am concerned about my physical health I can wear a fitness tracker, monitor my weight, activity level, and calorie consumption and I can make an informed decision whether or not to order that burger – my choice, taken under advisement.
We need to adopt the same approach when it comes to our financial health. If you use a digital form of payment the data you need to make informed decisions is already available – but most people either don’t bother or it’s just too difficult to get hold of in a way that encourages or enables behaviour change. I’m seeing more and more (albeit dispirit) examples of fintechs tackling various aspects of financial health monitoring – it’s like the early days of the “quantified self” / fitness tracking movement – it hasn’t all come together yet. I look forward to the day that I can get an alert on my phone that says “hey there – you’ve spent 30% more on coffee this week than you normally do – you’re going to exceed your (self-imposed) target before the end of the month” or “congratulations, you’ve achieved your spending and savings goals in every category this month – you can reward yourself with dinner with your wife (so long as you keep it under £100)” instead of a colourful pie-chart at the END of the month showing “spend by category” which is what my current bank considers “innovation”.
Sorry for the rant – it’s something I’m extremely passionate about for deeply personal reasons – if anyone reading this is or wants to do something about this – I’m available for hire!
SF: No worries AV, many banks take this view on innovation! You tell stories to help people try and think differently about possible futures, give us a recent example of one such story.
AV: I was asked by a client of mine to run a workshop on “The Future of Technology and Showering” – yeah – I know – nothing to do with Fintech! Technology change impacts every single industry and every single person on the face of the planet and what I do is applicable to everyone.
A couple of months later, I received an email from the sponsor of the workshop to say that the board had just approved a fairly substantial budget to set up an “Internet of things lab” for them to experiment and trial some of the ideas that came out of that day, with the workshop being cited as the inspiration for the initiative!
I’m looking forward to a connected shower in the near future – perhaps it will be able to differentiate between my wife and I, and it won’t dump a tropical storm of blazing water on her head when she uses the shower straight after me!
SF: Haha, I feel like a connected shower could make or break your day! Whilst we’re talking about great stories, tell us more about the book you’re working on.
AV: Ahhh – the book! Over the years I’ve had many, many people come up to me after a keynote and say “that was brilliant – you should write a book”. The problem is that by the time I wrote a book about what I speak about, things would have moved on. So I decided to write a book about HOW – thinking along the lines of “give a man a fish and you feed him for a day, teach a man to fish and you feed him for the rest of his life”.
So the book aims to help people and organisations that want to be more innovative, get started with innovating. I know there are countless tech innovation consultants out there that have a variety of takes on “the innovation funnel” – but I have an issue with funnels – they only flow one way! They don’t take into account the idea that some concepts are a bit before their time and others might just have needed to be distilled a bit more in order to be great. They also give the somewhat false impression that things progress in a nice orderly fashion as they are filtered down the funnel by the gates.
My approach embraces the fact that innovation is typically a bit more chaotic and requires a mixture of art and science – I use the metaphor of distilling alcohol in a “Moonshine Still” to introduce the elements you need to consider – from “harvesting and gathering” information to “fermenting”, “distilling” and “condensing” the ideas before “tasting” the output (in a lab) and finally getting it out to your thirsty customers.
It’s called “Making Moonshine” and it’s being written in a very colloquial style and will be littered with anecdotes that I’ve gathered along the way through my research and experiences. And if all else fails, I plan to include a recipe – so (if it’s legal to do so where you live of course) you can always drown your sorrows with some real “moonshine” if things don’t work out according to plan!
SF: If I’m a fintech startup, I have an idea that I wish to execute, where should I go and how could someone like you help me?
AV: London is currently the Fintech Capital of Europe (I’m not getting into the politics of BREXIT implications here – just stating current fact). If you don’t have a business angel or VC backing you, I’d advise getting into an incubator or accelerator program if you can. The good programs will open doors to a relevant network and if your proposition is viable you will attract the investment you need. If it’s not viable, you’ll either find out fast or be advised on a viable pivot (or advised quite bluntly to pack it in).
I’ve sadly seen many startups (not just in Fintech) that have been bootstrapped by their founders or friends and family / their immediate network that have been cash rich and burned all the money on a project that would never have stood up to scrutiny had it gone through a formal process. The founders often have a great idea but for a variety of reasons are naïve about the complexity of the landscape and have no real concept on how to execute within it – that’s where a good incubator or accelerator comes into play.
I keep on stressing “good programs” as although according to various reports there are upwards of 60 incubators / accelerators / corporate incubators in London right now, they don’t all offer the same opportunities and open the same doors. Some of the “incubators” are little more than co-working spaces – they might charge you a low “membership” fee in return for a couple of desks in a funky space where they might get an “inspirational business leader” to present once a week / month and perhaps a mentor or two will drop in occasionally to make themselves available for questioning and to impart a few words of wisdom. You might even be lucky enough to catch the attention of a Venture Scout on tour who might like your concept.
There are a lot of “might”s in there.
The more structured incubator / accelerator programs are difficult to get into – they will typically get anywhere between 200 – 400 (I’ve heard of some as high as 1,000) applications for selection for one of 10 – 12 places in a cohort. I’m currently an active mentor at one of these – Startupbootcamp – although they aren’t the only game in town – Wayra, Techstars, Oxygen and many more have similar approaches, benefits and costs of participation.
If you’re selected for one of these, congratulations – you’ve passed the first hurdle. Your application and concept has already been vetted by seasoned professionals – this doesn’t guarantee success but it gives you a fighting chance that you have a sound idea and someone is willing to place a bet on you – what now?
Typically, the incubation / acceleration program will be time-boxed – 4, 6, 12 months are common timeframes. You will often be required to give up anywhere between 2 – 10% of your equity in exchange for a place on the program. You may (often) be awarded an amount of cash (£20,000 – £50,000) and / or an allocation of technology resources like cloud computing, storage, etc along with a limited number of desks in a co-working space. During the program, you will typically have access to an “Entrepreneur In Residence” to help you flesh out your concepts and provide some input on how to execute and a mentor network where you will be paired with one or more mentors – some “hands on” who will visit on a regular basis and some “remote” who are there to help you address specific challenges and open their personal network to you for introductions and opportunities. You will also be subjected to a program of knowledge sharing on everything from business model generation to pitch preparation. You will also be expected to regularly update the management team of the accelerator / incubator on your progress and report back to mentors on a periodic basis. Your concept and progress might also be socialised across an affiliated VC or angel network and you can expect to pitch directly to organisations interested in early stage investment as this is a rich hunting ground for them. The end of the phase normally culminates in a pitch session to a room full of potential investors.
According to research, over 90% of startups that follow this route are successfully funded.
Now I have one single important message to anyone embarking on this journey – “don’t bring a knife to a gunfight”.
I’ve seen a fair few startups blow their chances by not bringing an “A-team” to the accelerator. I’ve seen people with great ideas, pitch something potentially game-changing to win a spot and then they arrive and take on a bunch of interns for a “summer project” in an attempt to build an MVP. That doesn’t usually end well! They spend more time and effort trying to get the interns up to speed with what they are really trying to achieve and what needs to be done than they do utilising the opportunity that has been provided to them to secure funding.
If you need tech and don’t have a tech team backing you – find one BEFORE you start and make sure you know how you are going to control the costs and hang on to as much of your equity for as long as possible. I’ve had people phone me up and say “hey, I’ve just secured a space on an incubator and I need a CTO asap – I’m willing to give 20% equity to the right person that can build me a team – can you recommend anyone?”. Excuse me? Are you insane? No, no, no.
SF: In that instance, I would, of course recommend they speak to Gluon! Tell me something that’s true, that almost nobody agrees with you on.
AV: It wasn’t really “better back in the old days”.
SF: That was your first short answer! Tell us what a typical day for AV looks like? What habits or rituals are in place that help you be successful on a day to day basis?
AV: Hmmm – “a typical day?” About the only 2 things that are fairly typical about my days is the time I wake up and the time I go to sleep ☺ On a weekday I’m typically up at 5am for a 5:30 workout (not that I look like I work out – it’s my justification for indulging in what I chose to eat) and no matter what day of the week it is I don’t usually see my bed before midnight!
Broadly speaking, my days fall into either “listening” or “talking”.
On “listening” days, about 70% of my time at the moment, I gather information by reading, scanning information sources, attending conferences and events and networking to find out what other people know.
On “talking” days I’m either writing, presenting, mentoring, advising or running workshops to share what I know.
SF: AV, I think we connected because you’re a nomad, like myself, and perhaps like me, you recognise that digital nomads are a growing phenomenon. Can you see any tech innovation on the horizon that will help businesses fully embrace this lifestyle choice by it’s employees?
AV: I think we already have all the technology that we need to execute on the idea that “work is something I do, not a place I go” and we’ve had this in place for a long time. In my last years of corporate life, not a single member of my team was allocated a desk in the same building as I was and although I had a desk allocated to me, I was seldom at it. I was either somewhere in the business or with customers, suppliers, academics, think tanks, conferences, events, boardrooms, on a plane somewhere in the world or working from home in the seclusion of my loft, away from interruptions when I needed the focus. My team came together in person when we needed to but functioned as required when we were apart. It was unimportant “when or where” something got done so long as project timelines were met and expectations exceeded.
We were more effective than many people I have come across that clock into the office at the same time every day and spend all day sitting in a chair, completely disengaged but “present and accounted for”.
It’s not a “millennial thing” as many try to insist, it’s a mindset thing that spans all age segments and it’s a growing, conscious choice by people in all levels of the organisation. It needs a change in management style, hiring, resource allocation and accounting policy for it to be a reality.
It’s going to take a “cultural innovation” to make this more commonplace.
SF: AV, it’s been a real pleasure, you’ve provided our readers with some great insight into your life, the payments process and the fintech startup process amongst other topics. I’m sure some readers will want to know more or get in touch with you for guidance, how can they do that?
SF: On behalf of myself and Gluon, we look forward to interacting more on the fintech network in the coming months, I’m sure our paths are going to cross quite frequently!